Ambassador Frank Wisner, former US envoy to India, says Finance Minister P Chidambaram's 2005 Budget is a stable and sensible fiscal document that has set some broad parameters for moving forward on key issues of importance to India.
"It is not a Budget with ringing messages, but a solid and sensible one that has set parameters on important issues like improving infrastructure, dealing with social programs and job creation objectives," Wisner, former chairman of the US-India Business Council, and vice-chairman, external affairs, of American International Group, told rediff.com.
Wisner, who by his own admission had spoken to a number of people in the American corporate world since the Budget was tabled in Parliament February 28, said that in general the American business has welcomed Chidambaram's Budget.
"Obviously, businesses in general like the signals they have seen about corporate tax rates and their reduction and further reduction of non-agricultural tariffs," Wisner said.
Asked if the Budget will help more American investment in India, Wisner said the economy itself will be sufficient to continue its attraction.
"I think the Budget is probably investment-neutral. It is the economy that is investment positive," he said, adding that the economy is robust, moving forward and is attracting foreign attention.
Wisner, however, said that the Budget is not specific on where much of the funding on infrastructure will come from nor does it really trim the fiscal deficit that remains pretty steady. Asked if he believes that is an area of concern, he replied in the affirmative. "It is always an area of concern in India," he said.
Wisner said while overall the Budget was good and sensible, the message of the finance minister was not very clear in certain sectors like banking although it came out really separate from the Budget. "I think the message on banking is a bit confused at this point because it is not cleat how the Reserve Bank of India will identify and put forward private banks for foreign participation," Wisner said.
"Also, for us in the insurance sector, we were hoping to see a signal as to when legislation would be introduced to deal with the (issue of) raising the present ownership capital of 49 per cent that could further energize and provide a savings vehicle for infrastructure development," Wisner said.
He also said that one would have liked to see a stronger signal on privatisation. "But one has to realise and recognize that given the politics that objective will be pursued very carefully," he said.
"But on the whole I must say that it is a sensible and encouraging Budget and if anyone has any doubt about it, one should look at he markets which responded very favorably in India," he added.
